Natural Gas and Future Technologies at the Core of Power Sector Expansion

Riyadh – BETH | B

Under the supervision of the Ministry of Energy, the Saudi Power Procurement Company (SPPC) has announced the opening of the prequalification process for the third phase of conventional power plant projects based on combined-cycle technology, which will be developed under the Build-Own-Operate (BOO) model.

The winning consortium for each project will own 100% of the project company established to develop and operate the Independent Power Producer (IPP) project, while each project company will sign a Power Purchase Agreement (PPA) with SPPC.

The projects aim to support the sustainable growth of Saudi Arabia's power sector in line with Saudi Vision 2030, by expanding the use of natural gas as a lower-carbon fuel while ensuring future readiness for carbon capture facilities, in line with the Kingdom's Circular Carbon Economy (CCE) approach and its carbon emissions reduction objectives.

As the Kingdom's designated principal buyer of electricity, SPPC is responsible for preparing preliminary studies, tendering and awarding independent power projects, and purchasing electricity generated from those projects under the license issued by the Saudi Electricity Regulatory Authority.

BETH Analysis

This new phase reflects Saudi Arabia's continued efforts to build a power system capable of meeting growing electricity demand while balancing energy security, generation efficiency, and emissions reduction.

Although these projects fall under conventional power generation, they rely on natural gas as a transitional fuel that is more efficient and produces lower emissions than liquid fuels. They are also designed to accommodate future carbon capture technologies, providing greater flexibility as the global energy sector continues to evolve.

The continued adoption of the Independent Power Producer (IPP) model also demonstrates the attractiveness of the Saudi energy market to investors while reinforcing private sector participation in developing the Kingdom's energy infrastructure within a clear and stable regulatory framework.

If this approach continues, Saudi Arabia is expected to develop a more diversified energy system that combines lower-emission conventional generation, renewable energy, and carbon management technologies, strengthening energy security while supporting economic and industrial growth over the coming decades.

The transformation of the energy sector does not mean abandoning conventional energy sources.

It means redefining how they are used with greater efficiency and sustainability.

The future of energy is therefore not about choosing between oil, natural gas, or renewables.

It is about building an integrated energy system that uses each resource where it delivers the greatest value, providing the economy with more reliable energy, lower emissions, and greater readiness for the future.